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Report: NFL Reducing EA's Contractual Obligations on  Madden  Due to Lockout

Report: NFL Reducing EA's Contractual Obligations on Madden Due to Lockout

February 15, 2011 | By Mike Rose

February 15, 2011 | By Mike Rose
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The National Football League has restructured its contract with Electronic Arts to account for the looming NFL lockout, according to media reports.

With no deal as of yet between the league and the players, and the NFL's collective-bargaining agreement due to expire on March 4, sports website SportsBusiness Daily reports that the NFL has significantly reduced EA's contractual obligations for next season.

In addition to reducing licensing fees in the wake of an impending lockout, EA and the NFL extended their exclusive video game-related licensing and sponsorship deal, which now runs until 2013.

No other publisher will be able to release an NFL-licensed game while the deal -- which originated in 2004 -- is in effect.

The deal between the NFL and EA allows the publisher to use team colors, names and logos in its Madden franchise. It is reported that the league has refused to reduce fees to any other licensees and sponsors as a result of the lockout.

Jacksonville Jaguars owner Wayne Weaver, chairman of the NFL's business ventures committee, told SportsBusiness Daily: "For one of our core partners in a difficult environment, we say let's look at this, and maybe it makes some sense to extend something out longer and give our partner some relief in the short term but gain something on the back end."

It is not known how much relief EA is gaining from the contractual reduction. Earlier this month, analysts examined what a potential NFL lockout could mean for EA and the Madden series.

Michael Pachter of Wedbush Securities said, "You've got to believe the hardcore guys will buy it because it will have all the new features. But the irregular buyers [of the franchise, who only buy every few years] probably won't."


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